Tuesday, June 19, 2012

Déjà Vu All Over Again!

It has been more than a year since I posted a blog and what’s even more remarkable than how quickly that time has passed is the fact that my topic continues to be a variation on the same theme as previous entries: unethical or questionable practices by some colleges, most of them for-profit entities.

But while there have been lots of allegations about aggressive recruiting practices, misrepresentation of job placement rates and misleading information about accreditation status, today’s topic may be the most reprehensible yet, not because the behaviors are new but, rather, because of the population being targeted: veterans and active-duty military personnel.

Most of the abuse stems from something called the “90-10” rule which requires that no more than 90% of a school’s revenue can come from federal financial aid. But for some reason, revenue from veteran’s benefits is considered “other” income and is not counted in the 90% limit. Congress has debated ways to get at this problem but no consensus has been reached on legislation. So, on June 12th, President Obama signed an executive order that will force schools to disclose more information about topics like financial aid and graduation rates. It also requires DOD to set rules for recruiting at military installations.

In addition, the order sets up a complaint system for reporting suspected institutional fraud or abuse of veterans’ benefits, and it requires institutions to abide by the same rules as schools that receive financial aid from the Education Department.

In an effort to get out ahead of the story, the Association of Private Sector Colleges and Universities (the organization that represents for-profit institutions) issued a statement on June 11th outlining “Five Tenets of Veteran Education.” Needless to say, APSCU disagrees with many elements of the Executive Order and the battles will no doubt continue.


  1. "But for some reason, revenue from veteran’s benefits is considered “other” income and is not counted in the 90% limit."

    As someone who used the GI Bill in college, I remember the funds not being included in their analysis of my financial need. They deducted $100 a month from my paycheck during my first year in service, and my benefits were $400 a month when I was enrolled. Since I'd "prepaid" and they were giving me a return on my investment, I can see why there was a policy barrier between those funds and other "federal financial aid." One is an earned benefit, the other is a form of aid.

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